March 17, 2013 5:02 pm

Japan hits top of Asian IPO chart

Companies have raised more cash in Tokyo this year than in Asia’s other developed markets put together, taking Japan to the top of the region’s initial public offering charts.

As investors have warmed to the pro-growth policies of Shinzo Abe, prime minister, since the beginning of January, newcomers to Japan’s markets have raised Y181bn ($1.9bn) - more than issuers in Singapore, Hong Kong and Australia combined, according to data from Bloomberg.

Globally, Japan ranks number two by funds raised – a position it has not occupied since the same point in 2006, according to Dealogic.

Mr Abe’s vow to reflate the world’s third-largest economy through a mixture of stimulus and structural reform has reawakened interest in stocks among Japan’s retail investors, who are the main players in smaller IPOs. Account openings at the top seven online brokerages have more than doubled since November.

Meanwhile, hopes of more aggressive monetary easing from the Bank of Japan have lured funds from abroad to support bigger offerings, such as the Y104bn debut last month of Nippon ProLogis, a real estate investment trust part-owned by ProLogis, the world’s biggest owner of industrial buildings.

Net buying of Japanese equities by overseas investors amounted to slightly more than Y1tn in the first week of March – the highest weekly figure in Tokyo Stock Exchange records going back to 1982.

Sentiment is improving “dramatically”, said Tamotsu Adachi, co-head of Carlyle Japan, which expects to float one of its portfolio companies – Broadleaf, an IT services provider – in a Y20bn deal next week.

Analysts said flows into stocks were likely to pick up further, if expectations of inflation began to rise. A survey of 1,000 individual investors carried out by Nomura this month found stocks were considered the most appealing investment choice, toppling the longstanding favourite – cash and deposits – for the second month in a row.

Almost three-quarters of investors said they would increase exposure to domestic equities if Mr Abe’s target of 2 per cent inflation “starts to look achievable”.

For now, though, investors are primed for more rapid gains. Shares in four of the nine companies and Reits to be offered in Tokyo this year at least tripled on their first day of trading. Altplus, a mobile game developer backed by Mizuho Capital, joined that club on Friday, rising 212 per cent from its opening price. First-day pops of this order were last seen in 1999 during Japan’s internet bubble.

Hiroshi Yamamoto, managing director of Mizuho Capital, said he was “not 100 per cent bullish, like the majority of participants. But we hope these markets continue.”

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